Sprout Social第二季收入增11%至1.238億美元 淨虧損大幅收窄至310萬

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
 

 
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
__________________________________
FORM 10-Q 
_________________________________
(Mark One)
☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from               to
Commission File Number 001-39156 
__________________________________
SPROUT SOCIAL, INC. 
(Exact name of registrant as specified in its charter)

Delaware

27-2404165

(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

131 South Dearborn St. 
,Suite 700

Chicago
,Illinois

60603

(Address of principal executive offices and zip code)

(866) 
878-3231

(Registrant's telephone number, including area code)

__________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, $0.0001 par value per share
SPT
The Nasdaq Stock Market LLC

__________________________________
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒  No  ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒  No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  
☒
Accelerated filer  
☐

Non-accelerated filer
☐
Smaller reporting company 
☐

Emerging growth company  
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 of the Exchange Act. ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): ☐ Yes ☒ No
As of July 31, 2026, there were 55,022,855 shares and 5,569,357 shares of the registrant’s Class A and Class B common stock, respectively, $0.0001 par value per share, outstanding.

TABLE OF CONTENTS

Page
Cautionary Note Regarding Forward-Looking Statements
2

PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements (unaudited)
4

Condensed Consolidated Balance Sheets
4

Condensed Consolidated Statements of Operations
6

Condensed Consolidated Statements of Comprehensive Loss
7

Condensed Consolidated Statements of Stockholders’ Equity
8

Condensed Consolidated Statements of Cash Flows
10

Notes to Condensed Consolidated Financial Statements
11

1. Nature of Operations and Summary of Significant Accounting Policies
11

2. Revenue Recognition
12

3. Operating Leases
13

4. Income Taxes
14

5. Revolving Line of Credit
14

6. Incentive Stock Plan
15

7. Commitments and Contingencies
16

8. Segment and Geographic Data
18

9. Net Loss per Share
19

10. Fair Value Measurements
20

11. Business Combinations
21

12. Subsequent Events
23

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
24

Item 3.Quantitative and Qualitative Disclosures About Market Risk
48

Item 4.Controls and Procedures 
49

PART II - OTHER INFORMATION

Item 1.Legal Proceedings
50

Item 1A.
Risk Factors
50

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
51

Item 5.Other Information
51

Item 6.Exhibits 
53

SIGNATURES
54

1

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this Quarterly Report on Form 10-Q (“Quarterly Report”) not based on historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about Sprout Social, Inc.’s (“Sprout Social”) plans, objectives, strategies, financial performance and outlook, trends, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “explore,” “future,” “intend,” “long-term model,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or the negative of these terms and similar expressions intended to identify forward-looking statements, as they relate to Sprout Social, our business and our management. Forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Sprout Social and our management based on their knowledge and understanding of the business and industry, are inherently uncertain. These forward-looking statements should not be read as a guarantee of future performance or results, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties and factors set forth under Part II—Item IA. Risk Factors” and “Part I—Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our most recent Annual Report on Form 10-K under Part I—Item 1A. “Risk Factors” and the risks and uncertainties related to the following:

•our ability to attract, retain, and grow customers;
•our future financial performance, including our revenue, cost of revenue, gross profit, operating expenses, ability to generate positive cash flow, and ability to achieve and maintain profitability;
•the timing of revenue recognition and the impact of our subscription-based business model on our operating results;
•our ability to access third-party APIs and data on favorable terms or at all;
•our ability to increase spending of existing customers;
•the evolution of the social media industry, including technological advances, utilization of artificial intelligence (AI) and adapting to new regulations and use cases;
•the introduction of AI technologies into our products, which may lead to increased governmental or regulatory scrutiny;
•our ability to innovate and provide a superior customer experience;
•our ability to successfully enter new markets, manage our international expansion and comply with any applicable laws and regulations;
•our ability to successfully adapt our sales, success, and compliance efforts to the demands of sophisticated enterprise customers;
•our ability to maintain and enhance our brand;
•our estimates of the size of our market opportunities;
2

•the effects of increased competition from our market competitors or new entrants to the market;
•our ability to securely maintain customer and other third-party data;
•our reliance on third-party service providers and infrastructure to operate our platform;
•our ability to comply with existing, modified or new laws and regulations applying to our business, including data privacy and security regulations;
•our ability to maintain, protect and enhance our intellectual property;
•worldwide economic conditions, including the macroeconomic impacts of fluctuations in inflation, interest rates and currency exchange rates, tariffs and trade tensions, and volatility in the capital markets and related market uncertainty, and their impact on demand for our platform and products;
•our ability to acquire, invest in, and integrate other businesses or technologies into our business or achieve the expected benefits of such acquisitions and technologies;
•our ability to successfully implement, and realize the benefits of, the workforce reduction plan approved in July 2026;
•our ability to attract and retain qualified employees and key personnel;
•our ability to manage our substantial debt in a way that does not adversely affect our business, and
•the other factors set forth under “Part II—Item IA. Risk Factors” in this Quarterly Report and in our Annual Report filed with the United States Securities and Exchange Commission (“SEC”) on Form 10-K under Part I—Item 1A, “Risk Factors.”

These factors are not necessarily all of the important factors that could cause our actual financial results, performance, achievements or prospects to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and we do not undertake or assume any obligation to update forward-looking statements to reflect actual results, changes in assumptions, laws or other factors affecting forward-looking information, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 In addition, statements such as "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this report. While we believe such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Sprout Social, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)

June 30, 2026December 31, 2025

Assets
Current assets
Cash and cash equivalents$119,929 $95,268 

Accounts receivable, net of allowances of $2,341 and $2,719 at June 30, 2026 and December 31, 2025, respectively
78,075 100,996 
Deferred commissions 28,956 26,995 
Prepaid expenses and other assets15,207 13,945 
Total current assets242,167 237,204 

Property and equipment, net9,982 9,864 
Deferred commissions, net of current portion 56,093 57,049 
Operating lease, right-of-use assets8,972 9,810 

Goodwill167,122 167,122 
Intangible assets, net34,917 39,733 
Other assets, net2,962 2,280 

Total assets$522,215 $523,062 
Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable$10,713 $10,115 
Deferred revenue193,419 205,639 
Operating lease liabilities2,799 2,664 
Accrued wages and payroll related benefits14,182 20,549 
Accrued expenses and other14,967 17,294 
Total current liabilities236,080 256,261 

Revolving credit facility32,500 40,000 
Deferred revenue, net of current portion1,169 752 
Operating lease liabilities, net of current portion10,583 12,055 
Other noncurrent liabilities13,333 10,572 
Total liabilities293,665 319,640 

4

Sprout Social, Inc.
Condensed Consolidated Balance Sheets (Unaudited) (cont’d)
(in thousands, except share and per share data)

June 30, 2026December 31, 2025

Commitments and contingencies (Note 7)
Stockholders’ equity
Class A common stock, par value $0.0001 per share; 1,000,000,000 shares authorized; 57,997,799 and 54,974,573 shares issued and outstanding, respectively, at June 30, 2026; 56,576,444 and 53,607,556 shares issued and outstanding, respectively, at December 31, 2025
5 5 
Class B common stock, par value $0.0001 per share; 25,000,000 shares authorized; 5,816,301 and 5,609,357 shares issued and outstanding, respectively, at June 30, 2026; 6,156,301 and 5,949,357 shares issued and outstanding, respectively, at December 31, 2025
1 1 
Additional paid-in capital673,832 638,894 
Treasury stock, at cost(38,153)(37,768)
Accumulated other comprehensive income— — 
Accumulated deficit (407,135)(397,710)
Total stockholders’ equity 228,550 203,422 
Total liabilities and stockholders’ equity
$522,215 $523,062 

See Notes to Condensed Consolidated Financial Statements.
5

Sprout Social, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Revenue
Subscription$121,877 $111,110 $241,897 $219,790 
Professional services and other1,970 668 3,447 1,277 
Total revenue123,847 111,778 245,344 221,067 
Cost of revenue
Subscription27,159 24,551 54,594 49,024 
Professional services and other600 383 1,156 748 
Total cost of revenue27,759 24,934 55,750 49,772 
Gross profit96,088 86,844 189,594 171,295 
Operating expenses
Research and development26,643 24,587 53,590 47,816 
Sales and marketing 47,416 48,152 95,962 95,604 
General and administrative24,698 26,420 48,557 51,392 
Total operating expenses98,757 99,159 198,109 194,812 
Loss from operations (2,669)(12,315)(8,515)(23,517)
Interest expense(618)(409)(1,285)(923)
Interest income843 946 1,594 1,841 
Other expense, net(291)356 (454)188 
Loss before income taxes (2,735)(11,422)(8,660)(22,411)
Income tax expense354 563 765 794 
Net loss$(3,089)$(11,985)$(9,425)$(23,205)
Net loss per share attributable to common shareholders, basic and diluted$(0.05)$(0.21)$(0.16)$(0.40)
Weighted-average shares outstanding used to compute net loss per share, basic and diluted60,242,25858,360,96659,990,66258,127,231

See Notes to Condensed Consolidated Financial Statements.
6

Sprout Social, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
(in thousands)

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Net loss$(3,089)$(11,985)$(9,425)$(23,205)
Other comprehensive loss:
Net unrealized loss on available-for-sale securities, net of tax— (1)— (3)
Comprehensive loss$(3,089)$(11,986)$(9,425)$(23,208)

See Notes to Condensed Consolidated Financial Statements.
7

Sprout Social, Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands, except share data)

Voting Common Stock (Class A and B)Additional
Paid-in
Capital
Treasury StockAccumulated other comprehensive lossAccumulated
Deficit 
Total
Stockholders’ Equity
SharesAmountSharesAmount
Balances at March 31, 202660,082,739 $6 $657,261 3,214,658 $(38,031)$— $(404,046)$215,190 
Stock-based compensation15,984 15,984 
Issuance of common stock from equity award settlement409,838 — — 
Taxes paid related to net share settlement of equity awards15,512 (122)(122)
Issuance of common stock in connection with employee stock purchase plan91,353 — 587 587 

Net loss(3,089)(3,089)
Balances at June 30, 202660,583,930 $6 $673,832 3,230,170 $(38,153)$— $(407,135)$228,550 

Voting Common Stock (Class A and B)Additional
Paid-in
Capital
Treasury StockAccumulated
other comprehensive lossAccumulated
Deficit 
Total
Stockholders’ Equity

SharesAmountSharesAmount
Balances at March 31, 202558,175,307 $5 $578,328 3,148,888 $(37,422)$1 $(365,603)$175,309 
Stock-based compensation20,292 20,292 
Issuance of common stock from equity award settlement586,481 — — 

Issuance of common stock in connection with employee stock purchase plan53,105 — 944 944 
Other comprehensive loss, net of tax(1)(1)
Net loss(11,985)(11,985)
Balances at June 30, 202558,814,893 $5 $599,564 3,148,888 $(37,422)$— $(377,588)$184,559 

8

Sprout Social, Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands, except share data)

Voting Common Stock (Class A and B)Additional
Paid-in
Capital
Treasury StockAccumulated other comprehensive lossAccumulated
Deficit 
Total
Stockholders’ Equity
SharesAmountSharesAmount
Balances at December 31, 202559,556,913 $6 $638,894 3,175,832 $(37,768)$— $(397,710)$203,422 
Stock-based compensation34,351 34,351 
Issuance of common stock from equity award settlement935,664 — — 
Taxes paid related to net share settlement of equity awards54,338 (385)(385)
Issuance of common stock in connection with employee stock purchase plan91,353 — 587 587 

Net loss(9,425)(9,425)
Balances at June 30, 202660,583,930 $6 $673,832 3,230,170 $(38,153)$— $(407,135)$228,550 

Voting Common Stock (Class A and B)Additional
Paid-in
Capital
Treasury StockAccumulated
other comprehensive lossAccumulated
Deficit 
Total
Stockholders’ Equity

SharesAmountSharesAmount
Balances at December 31, 202457,758,378 $5 $558,391 3,148,888 $(37,422)$3 $(354,383)$166,594 
Stock-based compensation40,229 40,229 
Issuance of common stock from equity award settlement1,003,410 — — 

Issuance of common stock in connection with employee stock purchase plan53,105 — 944 944 
Other comprehensive loss, net of tax(3)(3)
Net loss(23,205)(23,205)
Balances at June 30, 202558,814,893 $5 $599,564 3,148,888 $(37,422)$— $(377,588)$184,559 

9

Sprout Social, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)

Six Months Ended June 30,
20262025
Cash flows from operating activities
Net loss$(9,425)$(23,205)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization of property, equipment and software1,839 1,989 
Amortization of line of credit issuance costs119 110 
Accretion of discount on marketable securities— (7)
Amortization of acquired intangible assets4,816 2,586 
Amortization of deferred commissions14,374 10,919 
Amortization of right-of-use operating lease asset838 722 
Stock-based compensation expense34,011 39,961 
Provision for accounts receivable allowances1,080 2,245 
Loss on lease termination— 1,175 
Change in fair value of contingent consideration(848)— 
Other, net(431)— 
Changes in operating assets and liabilities, excluding impact from business acquisition
Accounts receivable21,841 14,524 
Prepaid expenses and other current assets(2,224)201 
Deferred commissions(15,380)(15,095)
Accounts payable and accrued expenses(3,787)(3,221)
Deferred revenue(11,803)(7,578)
Lease liabilities(1,336)(2,132)
Net cash provided by operating activities33,684 23,194 
Cash flows from investing activities
Expenditures for property and equipment(1,720)(2,265)

Proceeds from maturity of marketable securities— 3,750 

Net cash (used in) provided by investing activities(1,720)1,485 
Cash flows from financing activities

Repayments of line of credit(7,500)(10,000)
Payments for line of credit issuance costs— (486)

Proceeds from employee stock purchase plan587 944 
Employee taxes paid related to the net share settlement of stock-based awards(385)— 

Net cash used in financing activities(7,298)(9,542)
Net increase in cash, cash equivalents and restricted cash24,666 15,137 
Cash, cash equivalents and restricted cash
Beginning of period97,203 90,418 
End of period$121,869 $105,555 
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents$119,929 $101,532 
Restricted cash, included in prepaid expenses and other assets1,940 4,023 
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows$121,869 $105,555 

Supplemental disclosure of noncash investing and financing activities
Stock-based compensation expense capitalized in internal-use software$340 $268 

See Notes to Condensed Consolidated Financial Statements.
10

Sprout Social, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

1.Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Sprout Social, Inc. (“Sprout Social” or the “Company”), a Delaware corporation, began operating on April 21, 2010 to design, develop and operate a web-based comprehensive social media management tool enabling companies to manage and measure their online presence. Customers access their accounts online via a web-based interface or a mobile application. Some customers also purchase the Company’s professional services, which primarily consist of consulting and training services. The Company’s fiscal year end is December 31. The Company’s customers are primarily located throughout the United States, and a portion of customers are located in foreign countries. The Company is headquartered in Chicago, Illinois.
Principles of Consolidation and Basis of Presentation
The unaudited condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Company has prepared the unaudited condensed consolidated financial statements on a basis consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2025, and these unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of the interim periods presented but are not necessarily indicative of the results of operations to be anticipated for the full year or any future period. The consolidated balance sheet as of December 31, 2025 included herein was derived from the audited consolidated financial statements as of that date but does not include all disclosures including certain disclosures required by GAAP on an annual basis. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. 
The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 27, 2026.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. Actual results could differ from those estimates. The Company’s estimates and judgments include, but are not limited to, the estimated period of benefit for incremental costs of obtaining a contract with a customer, the incremental borrowing rate for operating leases, calculation of allowance for credit losses, valuation of assets and liabilities acquired as part of business combinations, useful lives of long-lived assets, stock-based compensation, income taxes, commitments and contingencies and litigation, among others. The Company is not aware of any events or circumstances that would require an update to its estimates and judgments or a revision of the carrying value of its assets or liabilities as of August 7, 2026, the date of issuance of this Quarterly Report on Form 10-Q. Actual results could differ from those estimates.
11

Sprout Social, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in Note 1 - “Nature of Operations and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements as of and for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 27, 2026. There have been no significant changes to these policies during the six months ended June 30, 2026.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The Company adopted the ASU as of January 1, 2026. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The ASU requires the disclosure of more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the statement of operations. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that this standard may have on its consolidated financial statements and related disclosures. 
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40, including removing stage-based rules and replacing them with a principles-based framework to be more aligned with modern software development practices. The ASU is effective for all entities for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures. 

2.Revenue Recognition
Disaggregation of Revenue
The Company provides disaggregation of revenue based on geographic region in Note 8 and based on the subscription versus professional services and other classification on the unaudited condensed consolidated statements of operations, as it believes these best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. 
12

Sprout Social, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

Deferred Revenue
Deferred revenue is recorded upon establishment of unconditional right to payment under non-cancellable contracts and is recognized as the revenue recognition criteria are met. The Company generally invoices customers in advance in monthly, quarterly, semi-annual and annual installments. The deferred revenue balance is influenced by several factors, including the compounding effects of renewals, invoice duration, timing and size. The amount of revenue recognized during the three months ended June 30, 2026 and 2025 that was included in deferred revenue at the beginning of each period was $90.5 million and $79.9 million, respectively. The amount of revenue recognized during the six months ended June 30, 2026 and 2025 that was included in deferred revenue at the beginning of each period was $147.9 million and $128.3 million, respectively.
As of June 30, 2026, including amounts already invoiced and amounts contracted but not yet invoiced, $400.8 million of revenue is expected to be recognized from remaining performance obligations, of which 71% is expected to be recognized in the next 12 months, and the substantial majority of the remainder in the next 13 to 36 months.

3.Operating Leases 
The Company has operating lease agreements for offices in Chicago, Illinois; Seattle, Washington; Dublin, Ireland; and Kraków, Poland. The Chicago lease expires in December 2032, the Seattle lease expires in January 2031, the Dublin lease expires in June 2027, and the Kraków lease expires in December 2029. These operating leases require monthly rental payments ranging from approximately $26,000 to $142,000. Under the terms of the lease agreements, the Company is also responsible for its proportionate share of taxes and operating costs, which are treated as variable lease costs. The Company’s operating leases typically contain options to extend or terminate the term of the lease. The Company currently does not include any options to extend leases in its lease terms as it is not reasonably certain to exercise them. As such, it has recorded lease obligations only through the initial optional termination dates above. 
The following table provides a summary of operating lease assets and liabilities as of June 30, 2026 (in thousands): 

Assets
Operating lease right-of-use assets $8,972 
Liabilities
Operating lease liabilities2,799 
Operating lease liabilities, non-current10,583 
Total operating lease liabilities$13,382 

The following table provides information about leases in the unaudited condensed consolidated statements of operations (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025

Operating lease expense$697 $652 $1,357 $1,327 
Variable lease expense467 472 934 1,302 

13

Sprout Social, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

Within the unaudited condensed consolidated statements of operations, operating and variable lease expense are recorded in General and administrative expenses. Cash payments related to operating leases for the six months ended June 30, 2026 and 2025 were $2.7 million and $3.4 million, respectively. As of June 30, 2026, the weighted-average remaining lease term is 5.4 years and the weighted-average discount rate is 7.0%.
Remaining maturities of operating lease liabilities as of June 30, 2026 are as follows (in thousands): 

Years ending December 31,
2026$1,800 
20273,345 
20282,699 
20292,748 
20302,508 
Thereafter2,926 
Total future minimum lease payments$16,026 
Less: imputed interest(2,644)

Total operating lease liabilities$13,382 

4.Income Taxes
The provision for income taxes for interim periods is generally determined using an estimate of the Company’s annual effective tax rate, excluding jurisdictions for which no tax benefit can be recognized due to valuation allowances. The Company’s effective tax rate differs from the U.S. federal statutory rate primarily due to a valuation allowance related to the Company’s federal and state deferred tax assets.
The Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. For the six months ended June 30, 2026, the Company recognized an immaterial provision related to state and foreign income taxes.
The Company assesses all available positive and negative evidence to evaluate the realizability of its deferred tax assets and whether or not a valuation allowance is necessary. The Company’s three-year cumulative loss position was significant negative evidence in assessing the need for a valuation allowance. The weight given to positive and negative evidence is commensurate with the extent such evidence may be objectively verified. Given the weight of objectively verifiable historical losses from operations, the Company has recorded a full valuation allowance on its domestic deferred tax assets except for those from the Company’s acquisition of NewsWhip Group Holdings Limited (“NewsWhip”) in 2025, which do not have a valuation allowance. Due to the Company’s cost-plus intercompany transactions, no valuation allowance is recorded on the Company’s foreign deferred tax assets except for its Ireland net operating loss deferred tax asset that resulted from the NewsWhip acquisition. The Company may be able to reverse the valuation allowance on its domestic deferred tax assets when sufficient positive evidence exists to support the reversal of the valuation allowance.

5.Revolving Line of Credit
On August 1, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the banks and other financial institutions or entities party thereto as lenders 
14

Sprout Social, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

and MUFG Bank, LTD. as administrative agent and collateral agent. The Credit Agreement provides for a $100 million senior secured revolving credit facility (the “Facility”). Borrowings under the Facility may be used to finance acquisitions and other investments permitted under the terms of the Credit Agreement, to pay related fees and expenses and for general corporate purposes. 
On April 4, 2025, the Company entered into the First Amendment to Credit Agreement (the “Amendment”, and the Credit Agreement as amended thereby, the “Amended Credit Agreement”) which, among other things, extended the maturity date of the Facility from August 1, 2028 to April 4, 2030 and revised the manner in which the applicable interest rate is determined from a liquidity based determination to a leverage based determination. In addition, the Amendment removed the minimum liquidity and annual recurring revenue covenants contained in the Credit Agreement and replaced them with financial covenants as to (i) maximum Consolidated Senior Net Leverage Ratio and (ii) minimum Consolidated Interest Coverage Ratio (each as defined in the Amended Credit Agreement). As of June 30, 2026, the Company was in compliance with such financial covenants in the Amended Credit Agreement.
Pursuant to the Amended Credit Agreement, borrowings under the Facility may be designated as SOFR Loans or ABR Loans (each as defined in the Amended Credit Agreement), subject to certain terms and conditions under the Amended Credit Agreement, and bear interest at a rate of either (i) SOFR (subject to a 1.0% floor), plus 0.10%, plus a margin ranging from 2.25% to 2.75% based on the Company’s Consolidated Senior Net Leverage Ratio or (ii) ABR (subject to a 2.0% floor) plus a margin ranging from 1.25% to 1.75% based on the Company’s Consolidated Senior Net Leverage Ratio. For the six months ended June 30, 2026, the borrowings under the Facility were designated as SOFR Loans and the weighted average interest rate in effect for the outstanding balance was approximately 6.06%. The Facility also includes a quarterly commitment fee on the unused portion of the Facility of 0.30% or 0.35% based on the Company’s Consolidated Senior Net Leverage Ratio. 
The Amended Credit Agreement includes customary conditions to credit extensions, covenants and customary events of default, including restrictions on the Company’s ability to incur liens, incur indebtedness, make or hold investments, execute certain change of control transactions, business combinations or other fundamental changes to its business, dispose of assets, make certain types of restricted payments, including dividends and other distributions to stockholders, enter into certain related party transactions or amend or terminate certain contracts, subject to customary exceptions. 
As of June 30, 2026, the Company had an outstanding balance of $32.5 million under the Amended Credit Agreement.
Debt issuance costs associated with the Facility were recorded to Other assets, net within the unaudited condensed consolidated balance sheets and are being amortized as interest expense on a straight-line basis over the term of the Facility.

6.Incentive Stock Plan
Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations as follows: 
15

Sprout Social, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025

(in thousands)
Cost of revenue$555 $684 $1,129 $1,430 
Research and development5,374 6,405 11,299 12,611 
Sales and marketing4,514 6,089 9,524 12,025 
General and administrative5,421 6,988 12,059 13,895 
Total stock-based compensation$15,864 $20,166 $34,011 $39,961 

7.Commitments and Contingencies
Contractual Obligations
The Company has non-cancellable minimum guaranteed purchase commitments for primarily data and services. Material contractual commitments as of June 30, 2026 that are not disclosed elsewhere are as follows (in thousands):

Years ending December 31,
2026$43,793 
202717,660 
202813,352 
2029— 
2030— 
Thereafter— 
Total contractual obligations$74,805 

Legal Matters
From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. 
Beginning on May 13, 2024, the Company and certain of its executives were named in two putative securities fraud class action cases filed in the United States District Court for the Northern District of Illinois asserting claims under Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5. The first action, captioned Munch v. Sprout Social, Inc., et al. was filed on May 13, 2024 and alleged that the defendants made false or misleading statements and omissions of fact relating to the Company’s business, operations and prospects, including (i) purported integration challenges arising from the Company’s August 2023 acquisition of Tagger Media, Inc. (“Tagger”), (ii) the Company’s ability to service (and the viability of its strategic plan to focus on) the enterprise market, and (iii) as a result, the Company’s 2024 financial guidance was required to be adjusted downward. The Munch complaint sought damages and costs on behalf of a putative class of Company stockholders from November 3, 2023 through and including May 2, 2024. The second case, captioned City of Hollywood Police Officers’ Retirement System v. Sprout Social, Inc., et al (the “City of Hollywood Action”), was filed in the United States District Court for the Northern District of Illinois on July 2, 2024. It asserted claims under the same 
16

Sprout Social, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

statutory provisions based on substantially similar allegations of misconduct as its predecessor, but alleged a class period beginning on November 3, 2021 and ending on May 2, 2024. 

On November 12, 2024, the court appointed the Employees’ Retirement System for the City of Baltimore (the “City of Baltimore”), who had been substituted as the named plaintiff in the City of Hollywood action, as the Lead Plaintiff under the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The court subsequently consolidated the two cases (the “Consolidated Securities Action”) on December 13, 2024. 

On January 24, 2025, the City of Baltimore filed an amended Consolidated Class Action Complaint (the “AC”). The AC retains the original defendants, but adds Jason Rechel, Sprout Social’s former head of Investor Relations, as an individual defendant.

The AC makes similar allegations to those asserted in the City of Hollywood Action and adds additional allegations, including